Defense Companies Warn: Cutting Military Spending Can Be Expensive

First used in the Gulf War, the Tomahawk cruise missile has become a vital instrument of naval firepower.

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With more than a decade of overseas operations coming to an end, the Pentagon is cutting back spending, leading to plenty of grumbling from the companies that rely on defense spending for much of their income.

One of those companies: Raytheon, maker of Tomahawk missiles and other military gadgets. In January, the Navy proposed the company end production of new Tomahawks in 2017 . Its stockpile of about 3,000 of the missiles is more than the 2,300 that have been fired in all combat operations combined.

Raytheon is warning that if it shuts down production of the Tomahawk and the U.S. finds itself in a situation where it needs more of them, it will be complicated and expensive to get production going again. As the WSJ’s Doug Cameron reports:

Raytheon contends that halting its Tomahawk production line in Tucson, Ariz., ahead of the 2019 upgrades would drive some suppliers out of business, and push engineers to other sectors, eroding the military’s ability to field an important weapon. The company sent the Pentagon a list of a dozen companies that Raytheon executives believe could close or be forced to leave the defense sector, according to people familiar with the situation.

The Pentagon says it takes such concerns seriously. “[We] recognize the need to maintain the vendor base activity as far into the future as we can,” said Capt. Joe Mauser, the Tomahawk program’s executive officer.

In its annual report on the defense industrial base last October, the Pentagon detailed a “serious and valid concern” about the health of some small suppliers for cruise missile programs, and mapped out efforts to find alternative suppliers.